Legal Question in Wills and Trusts in New Jersey
My parents transferred their house to their kids (A, B and C) as tenants-in-common. Each of us has one third. One child (C) is unstable and so my parents created an irrevocable inter vivos trust for the benefit of C. A and B are trustees. If C owes a lot of money, can the state (or any other creditor) go after the house proceeds? Can the state (or any other creditor) take payment from her portion of the house OR from our portions?
2 Answers from Attorneys
Your question is somewhat unclear and more facts are needed for a specific answer. Who might C owe a lot of money to? The State (like Medicaid), a general creditor and for what? In general a creditor cannot compel a trustee to distribute money from an irrevocable trust to satisfy the creditor's claim, but there are exceptions to the general rule. Plus, I have not seen the trust document so I do not know if distributions can be made for C and, if they can be,, under what circumstances, when and to pay what? Your (A and B) personal assets cannot be reached by a creditor of C, Also, there may be issues involving the house and a creditor's right to compel partition (forced sale of C's interest). Contact me with answers to my questions and I will try to provide more specific answers to your questions.
I have dealt with situations like this, and it can get very messy. I need more information to give you any advice. Why don't you call my office, and bring in the paperwork, and we will talk it over. I will tell you what I see. No charge for the first office meeting.
Robert Davies, Esq. 201-820-3460
The Davies Law Firm, P.A.
45 Essex Street, Suite 3 West
Hackensack New Jersey 07601
Phone: 201-820-3459
Fax: 201-820-3461
Email: [email protected]
Website: AttorneyRobertDavies.com